More channel program executives who focused on sales effectiveness initiatives reported an increase in revenue than those who focused on operational efficiency initiatives, according to a new survey released Monday by BLUEROADS and research firm Sirius Decisions.
Of those executives surveyed who said they focused on sales effectiveness activities, such as lead management and deal registration, 62 percent reported an increase in revenue. In contrast, of those who focused investment on efficiency programs, such as training, partner portals and partner communication tools, 40 percent reported an increase in channel revenue.
What’s more, 20 percent of the operationally focused channel executives reported their programs as “failing” while none of those focused on sales effectiveness did.
“It’s not that the activities on the efficiency front are bad investments, but if you are going to be revenue-centric, you need to balance your investment accordingly,” said Craig Downing, director of product marketing for BLUEROADS, a provider of opportunity management solutions to vendors.
“The Channel Survey: 2009 Priorities” included responses from 55 channel executives from a range of industries, including software, telecommunications, computer hardware and information services, on their channel plans, investments and expectations. Twenty percent of those surveyed were telecom service providers; 14 percent were telecom gear vendors.
As part of the survey, channel chiefs were presented a list of 30 activities from which to select their top investments.
“Too many channel chiefs are engaged in low-risk, low-return activities,” said Charles Watson, senior vice president of marketing and sales for BLUEROADS. “Too few are ready to drive fundamental changes that help them achieve greater equality with direct sales and enable increased visibility, empowerment and accountability in the channel.”
Downing added efficiency investments tend to be vendor-centric (how can we automate and do things quicker and easier) while effectiveness investments tend to be partner-centric (how can we help you sell more).
The survey results indicated that vendors are seeking to drive revenues, but don’t always know how, and often resorted to tactics, such as channel partner recruitment rather than focusing on programs that improved existing partner performance.
The problem with trying to recruit more partners into the pool is finite and vendors end up stealing partners from each other instead of getting truly new ones, said Downing. Without adding value to the program, partners are going to shop around and hop around, he added.
Downing said the contrast between the channel chiefs that said they focused on sales effectiveness versus operational efficiencies is clear. Seventy-five percent of the sales-focused chiefs had pipeline reporting requirements, while only 41 percent of the operations-focused chiefs did. Fifty-six percent of sales-focused chiefs required deal registration while only 21 percent of the operations-focused chiefs did. Finally, 44 percent of the sales-focused chiefs had lead programs while only 20 percent of the operations-focused chiefs did.
The survey did not indicate the maturity of the programs that were focused on sales versus operations. Watson said while it’s reasonable to expect that a startup should be more focused on operations, even new programs need to strike a balance in investment. “If you give a channel chief a ‘get out of jail free card’ to get the operational efficiencies in place, he never gets out of that mode,” he said, noting if you spend one or two years focused only on operations, you have already lost.
This is particularly important to channel executives who are struggling to demonstrate the value they provide to the company, added Downing. “Channel chiefs are an endangered species; they are churning every 12 to 18 months,” he said, noting that while that could be a result of a lack of commitment/investment on behalf of the company, it also may be due to misplaced investments by the channel chief.
